· Tigere declares dividends above regulated minimum
· Projected GRM outshines peers
· Occupancy levels expected to reach 100%
Harare - The Tigere Real Estate Investment Trust (REIT), which listed as the first ever REIT on ZSE last year, reported a positive financial performance in the 2-months to 31 December 2022. The REIT listed on ZSE in November, 2022, and the financial results are covering the period since its listing to December, 31. Upon its inception, the management said they would distribute 80% of the proceeds after deducting all relevant costs as dividends to the investors. In a FY report recently published by the REIT, a maiden dividend of USD152,577 as well as an additional ZWL 75,816,772 was declared, and the asset manager could not declare a further dividend as they had already exceeded the minimum legislated distributable funds of 80%.
Tigere REIT recorded a total rental income of US$205,032 in the period under review. Meanwhile, the investment property under the portfolio closed the period at a valuation of US$22,100,000. Assuming the REIT sustains the same level of financial performance, annual revenue can be projected at US$1,230,192. The properties performance from Tigere in the 2-months under review reflects, therefore, a Gross Rent Multiplier of 18 times. On the other hand, Mashhold recorded a rental income of ZWL2,558,288,987 in the full year to 31 December 2022, along with a properties valuation of ZWL66,865,248,000. The properties portfolio from Mashhold recorded a Gross Rent Multiplier of 26 in the 1-year, which is 8-points ahead of Tigere. This indicates a better performance indication from Tigere since a lower GRM represents a higher rental yield in comparison to the value of the investment properties.
On the other hand, the financial performance from Tigere in the 2-months to December 2022 can be projected to an annual rental yield of 6%, which is above the 4% recorded by Mashhold in the just ended full-year. However, Tigere expects the returns to go up in the short to medium-term as occupancy levels are projected to reach 100% by end of March, 2023. Tigere leverages on strong leases and conveniently located properties which have also attracted occupancy from restaurants, which in-turn increases customer turnover on the properties.
Outside of rental income, Tigere REIT recorded a total utilities income of US$37,408. However, this was heavily dragged by utilities expenses which amounted to US$41,641, thereby resulting in a net property income of US$200,799 in the period under review. The REIT did not incur any additions or disposals in investment properties in the period under review.
Tigere currently boasts of a market capitalization of ZW$35,983,845,345.80. In the financial results posted by the REIT, they alluded to have used the auction market exchange rate for currency exchange purposes. At the prevailing auction exchange rate, the market capitalization converts to US$38,751,113, which is more than its underlying capital employed of US$23.4 million. The REIT on ZSE currently trades at ZW$50.02, which converts to US$0.05. With projected annual earnings of US$780,240, Tigere boasts of a current Price-to-Earnings ratio of 50 times, which is above the global average of 40 times in the real estate sector.
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